Even with the nation's largest insurer leaving, Obamacare is nowhere near dead

Obamacare was
dealt a huge image blow on April 19 when United
Healthcare announced that it was pulling its plans from all
but a "handful" of the state exchanges set up by the Affordable
Care Act.

Despite United Health's move, however, any idea that it could be
the end of the ACA is greatly exaggerating the impact.

As we've noted before, for many consumers there should be very
little increase in premiums or choice on the exchanges. So those
shopping for health coverage on the exchanges will likely not
even notice.

The longer-term worry, according to Cynthia Cox of the Kaiser
Family Foundation, would be that it could create a question over
the viability of the exchanges.

"The biggest question for everyone is 'How does this change
the game?'" Cox, a researcher at the nonpartisan firm, told
Business Insider. "What this says about the exchanges more
broadly could have more effects on the market down the road."

How the future of the it plays depends on three groups: insurance
companies outside of United Health, possible enrollees, and
politicians. While Cox said it's hard to calculate the exact
moves of these groups, in the end the viability of the law
probably isn't in question.

"There are some signs that [Obamacare] is going to be sticking
around for awhile," said Cox.

Insurance companies

The biggest long-term fear after the United Health departure
is that other insurers would also exit the exchanges,
leaving little competition and making the exchanges
incredibly unattractive for consumers.

"It's obviously symbolic for United to exit the exchanges,"
said Cox. "Their withdrawal raised the question of whether or not
other companies were going to drop out."

Based on the response immediately following the exit, however,
Cox doesn't se any other businesses ditching the ACA.

Felue
Chang who is newly insured under an insurance plan through the
Affordable Care Act receives a checkup from Dr. Peria Del
Pino-White at the South Broward Community Health Services clinic
on April 15, 2014 in Hollywood, Florida.Joe Raedle/Getty Images

Other large insurers such as Cigna and Anthem expressed their
commitment to the marketplace. Centene, which covers more than 10 million
nationwide, is actually going to invest further into the
programs after making a solid profit from the exchanges.

"Even a smaller insurer like Wellcare is possibly getting into
exchanges in places like Iowa now that United is out," said Cox.
"It's almost like one door closing and a number of other doors
opening in terms of insurance companies."

Even United Health itself may come back to the exchanges
according to Cox. One of the biggest problems was that the
company was offering higher cost plans in the exchanges, which
are very sensitive to price.

"It may be that United takes a year or two to re-do their model
and the re-enter after they develop lower cost, competitive
plans," said Cox.

Strike doom and gloom for insurance companies off the list.

Everyday Americans

The second domino that is concerning is the possibility that
fewer people see the exchanges as a real option.

Enrollment numbers are already underwhelming, and the
worry is that even more people won't enter the exchanges since
there will be fewer options after United Health departs.

"One possible thing to consider is that enrollment isn't getting
to its targets already," said Cox. With undershot enrollment
already and possible discouragement, this could make the
exchanges less profitable for companies, causing them to pull out
like United Health.

Aside from investors, few people are likely to shed tears
over insurance companies losing money.But they
should, since the availability of affordable insurance is key to
the success of the marketplaces and the ACA more
generally. Unlike UnitedHealthcare, the health
insurance marketplaces are core markets for these BCBS plans, so
they’re likely to stick around. However, the losses suggest that
bigger premium increases may be coming for 2017

The thing is, United Health only insures a little over 700,000 of
the 10 million people on the exchanges, and is not in a large
number of markets. Also, a large majority of areas still have
three or more insurers to choose from.

Kaiser Family Foundation

In terms of the low existing enrollment, Cox believes that a
combination of continued outreach by the government and private
companies along with a little financial pain will spur more sign
ups.

"The full penalty from the mandate hasn't hit yet," said Cox. "It
won't be until this year that people will pay the full penalty
for not having health insurance, and even then it doesn't show up
until their taxes in 2017 after the enrollment period is over."

Even
analysts at Citi believe that the penalties and other
incentives to sign up will drive enrollment, and say it
could be a "profitable end market" for many insurers.

Anti-Obamacare
protesters wear masks of U.S. President Barack Obama and Grim
Reaper as they demonstrate in front of the U.S. Supreme Court
June 28, 2012 in Washington, DC.Alex
Wong/Getty Images